Aberdeen needs to develop a tax increment financing policy - at least that's what Toby Morris, who specializes in community growth, thinks. Morris, who hails from Pierre and is vice president of public finance with Northland Securities, met with the Aberdeen City Council in a work session on Monday to answer questions the council had about TIFs. His No. 1 recommendation was to develop a policy - whether general or specific. A TIF allows property taxes on improvements to be used to help pay off bonds issued to pay for the improvements. The city would issue the bonds, which must be paid back within 20 years. Morris said tax increment financing is becoming more popular, and the city must get a handle on determining what's best for the city, whether it's defining an area of town that needs to be developed, defining what blight is or determining what types of housing developments qualify for TIFs. Councilman Lloyd Hodgin said someone should be checking whether TIF requests even qualify before they go before the planning commission. There are several state statutes that must be met before a TIF can be issued. Morris agreed. In several of the cities Morris works with, TIF committees have been formed to check those state laws, he said. Usually the committee consists of representatives from the city, county and school district because those are the three entities affected by TIFs. “People are starting to realize that TIFs are very powerful economic tools,” Morris said. Stanley Altman, of rural Aberdeen, said Monday that using a TIF for residential housing is against the law. Two contractors have applied for TIFs for separate housing projects. If the city approved the two pending TIF requests, it would be in violation, Altman said. Morris said that's not accurate. If the TIFs are being used for infrastructure, they're not being used for housing, he said. They're being used as an incentive for developers to build the housing, he said. There are eight to 10 TIFs in South Dakota being used as incentive for housing developments, Morris said. If it's illegal to use them toward residential development, that wouldn't be the case, he said. Adam Altman, city attorney - and Stanley Altman's son - distributed Rapid City's policy regarding TIFs and said it would be a good base for Aberdeen's policy should the council decide the city needs one. Next week, the council will meet in a work session to discuss whether it needs a TIF policy and, if so, what it should include.